HFS Research has gone where no one has been before as we take a serious look at benefits outsourcing and expose how many of today’s providers still operate in the dark ages.
For our groundbreaking HFS Horizons: Employee Benefits Administrators, 2023 report, we evaluated 25 benefits administrators and service providers (see Exhibit 1) and interacted with 125 enterprises that contract with them. It’s the most extensive slate and comprehensive study on this industry yet. US healthcare is shifting: Employer medical underwriting surpassed commercial insurers, the aspirations of a post-pandemic multi-generational workforce continue to evolve, and the proliferation of technology is accelerating—yet benefits administration appears stuck in a legacy paradigm.
We evaluated the 25 benefits administrators for their ability to address the cost (Horizon 1), experience (Horizon 2), and health outcomes (Horizon 3) for employees globally.
Note: Service providers in each Horizon are listed alphabetically.
The multi-generational global workforce has constantly evolving expectations
Five generations coexist in the current workforce; they have distinct world views, varied aspirations, and different pandemic recovery strategies. Yet, when it comes to benefits—whether health (wellness and healthcare), wealth (financial planning and retirement), or professional (career and training)—there is an extraordinary bias toward a one-size-fits-all model. Employers and benefits administrators are guilty of not sufficiently investing in understanding their employees’ evolving needs and not reimagining how they address their health, wealth, and professional needs beyond traditional solutions.
Same old, same old
Many benefits administrators are satisfied with delivering the same set of services through the same modalities, year after year. The intrinsic apathy is befuddling, given that generational needs continue to evolve and remain unmet. According to the US Centers for Disease Control and Prevention (CDC), the US population’s life expectancy has regressed to 1996 levels—in 2019 it was 79 and now it is 76.1—and 60% of the population has a chronic condition such as diabetes, obesity, or hypertension. The Employee Benefit Research Institute (EBRI) indicated that in 2023, Americans’ confidence in retiring comfortably has declined. Given these deteriorating statistics, benefits administrators and employers must do more to address the deterioration in their sphere of influence and reimagine a paradigm to keep improvements sustainable.
A new generation of providers is leveraging technology to make a difference
Still, there is hope. A new generation of providers is leveraging technology to make a difference. Technology enablement is driven by a slow paradigm shift that engages employees, converts feedback into solutions, and measures outcomes beyond the tactical. These benefits administrators utilize data smartly and effectively to improve benefits utilization rates, track efficacy, and improve access. The proliferating mobile apps are becoming table stakes, while many firms are making usability a foundational capability to address experience gaps. The extensive use of technology impacts costs, though the underlying cost of benefits is slowing the progression of reducing costs materially.
The Bottom Line: The needs of today’s multi-generational global workforce require a new paradigm—a challenge benefits administrators must address immediately or be disrupted.
The HFS Horizons: Employee Benefits Administrators, 2023 report includes detailed profiles of each benefits administrator and service provider, outlining capabilities, strengths, provider facts, and development opportunities.